SocGen Boss Says ‘Worst Is Behind Us’

By Noemie Bisserbe

Societe Generale SA Chief Executive Frederic Oudea said Wednesday that with last week’s Greek debt restructuring the worst of the most serious economic and financial crisis in over 80 years had been overcome.

Mr. Oudea said the French bank’s diversified business model had helped it shoulder the current downturn.

“Risk diversification is a source of security,” he told reporters in Paris. He said “we have shown that we can adapt ourselves quickly, even as, more than ever, we are in a crisis, probably the most serious one since 1929,” he said.

With the restructuring of Greece’s debt, “the worst is behind us,” he said, adding that a disorderly default would have been “very negative” for Europe. “If after saying during two years that Greece wouldn’t exit the euro zone, that there will be support from both the private and public sector, how credible would be EU governments if they afterwards said Greece will be the only country [to exit Europe]?” Oudea said.

“The euro zone is not yet in the clear, but the extreme fears are behind us,” he said.

Mr. Oudea also dismissed fears of a credit crunch in France. However, financing local authorities and governments may prove difficult. “From now on, local governments are the ones that present the biggest problem in terms of financing,” he said.

The new rules governing banks in Europe and local governments’ obligation to keep their deposits with the French Treasury, discourages banks from lending to local authorities, he explained.